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EXHIBIT 10.5
EXTENSITY, INC.
SERIES D PREFERRED STOCK PURCHASE WARRANT
THIS WARRANT AND THE SHARES WHICH MAY BE PURCHASED UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER, PLEDGE OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS UNLESS SOLD
PURSUANT TO RULE 144 OF THE ACT.
Effective Date: June 29, 1998
NO. 1998D-1 Void after March 25, 2008
THIS CERTIFIES THAT, for value received, Comdisco, Inc. (the "HOLDER")
is entitled to subscribe for and purchase shares of fully paid and nonassessable
Series D Preferred Stock, par value $0.01 per share, (the "DESIGNATED PREFERRED
STOCK") of Extensity, Inc., a Delaware corporation (the "COMPANY").
1. Purchase Right. This Warrant represents the right of the Holder to
subscribe for and purchase up to an aggregate of 8,290 shares of fully paid and
nonassessable Designated Preferred Stock at an exercise price of $3.30 per share
(as adjusted pursuant to Section 4 hereof) (the "EXERCISE PRICE") .
2. Method of Exercise; Payment.
(a) Cash Exercise. The purchase rights represented by this
Warrant may be exercised by the Holder, in whole or in part, by the surrender of
this Warrant (with the notice of exercise form attached hereto as EXHIBIT A duly
executed) at the principal office of the Company, and by the payment to the
Company, by certified, cashier's or other check, of an amount equal to the
aggregate Exercise Price for the number of shares of Designated Preferred Stock
being purchased.
(b) Net Issue Exercise. The Exercise Price may be paid at the
Holder's election either (i) by cash or check, or (ii) by surrender of this
Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to the Holder a number of shares
of Designated Preferred Stock computed using the following formula:
2
X = Y(A-B)
-----
A
Where X = the number of shares of Designated Preferred Stock to be
issued to the Holder
Y = the number of shares of Designated Preferred Stock
purchasable under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant
being canceled (at the date of such calculation)
A = the fair market value of one share of the Company's
Designated Preferred Stock (at the date of such
calculation)
B = the Exercise Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, fair market value of the Company's
Designated Preferred Stock shall mean such fair market value as is reasonably
determined as follows:
(i) if the exercise is in connection with an initial
public offering of the Company's Common Stock, and if the Company's Registration
Statement relating to such public offering has been declared effective by the
SEC, then the fair market value per share shall be the product of (x) the
initial "Price to Public" specified in the final prospectus with respect to the
offering and (y) the number of shares of Common Stock into which each share of
Designated Preferred Stock is convertible at the time of such exercise;
(ii) If this Warrant is exercised after, and not in
connection with the Company's initial public offering, and;
(a) if traded on a securities exchange, the fair
market value shall be deemed to be the product of (x) the average of the closing
prices over a twenty-one (21) day period ending three days before the day the
current fair market value of the securities is being determined and (y) the
number of shares of Common Stock into which each share of Designated Preferred
Stock is convertible at the time of such exercise; or
(b) if actively traded over-the-counter, the
fair market value shall be deemed to be the product of (x) the average of the
closing bid and asked prices quoted on the NASDAQ system (or similar system)
over the twenty-one (21) day period ending three days before the day the current
fair market value of the securities is being determined and (y) the number of
shares of Common Stock into which each share of Designated Preferred Stock is
convertible at the time of such exercise;
(iii) if at any time the Common Stock is not listed on
any securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the current fair market value of the Company's Common Stock shall be the
product of (x) the highest price per share, as determined in good faith by its
Board of Directors and (y) the number of shares of Common Stock into which each
share of Designated Preferred Stock is convertible at the time of such exercise,
unless the Company shall become
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subject to a merger, acquisition or other consolidation pursuant to which the
Company is not the surviving party, in which case the fair market value of
Designated Preferred Stock shall be deemed to be the value received by the
holders of the Company's Designated Preferred Stock on a common equivalent basis
pursuant to such merger or acquisition.
(c) Stock Certificates. In the event of any exercise of the
rights represented by this Warrant, certificates for the Designated Preferred
Stock so purchased shall be delivered to the Holder within a reasonable time,
and in no event later than thirty (30) days thereafter, and, unless this Warrant
has been fully exercised or has expired, a new Warrant representing the shares
with respect to which this Warrant shall not have been exercised shall also be
issued to the Holder within such time.
3. Stock Fully Paid; Reservation of Shares. All of the Designated
Preferred Stock issuable upon the exercise of the rights represented by this
Warrant will, upon issuance and receipt of the Exercise Price therefor, be fully
paid and nonassessable, and free from all taxes, liens and charges with respect
to the issue thereof. During the period within which the rights represented by
this Warrant may be exercised, the Company shall at all times have authorized
and reserved for issuance a sufficient number of shares of its Designated
Preferred Stock to provide for the exercise of the rights represented by this
Warrant.
4. Adjustment of Exercise Price and Number of Shares.
(a) Subject to the provisions of Section 12 hereof, in the event
that the Company shall at any time subdivide the outstanding shares of
Designated Preferred Stock or shall issue a stock dividend on its outstanding
shares of Designated Preferred Stock, then the number of shares of Designated
Preferred Stock issuable upon exercise of this Warrant immediately prior to such
subdivision or to the issuance of such stock dividend shall be proportionately
increased, and the Exercise Price shall be proportionately decreased, and in the
event that the Company shall at any time combine the outstanding shares of
Designated Preferred Stock the number of shares of Designated Preferred Stock
issuable upon exercise of this Warrant immediately prior to such combination
shall be proportionately decreased, and the Exercise Price shall be
proportionately increased, effective at the close of business on the date of
such subdivision, stock dividend or combination, as the case may be.
(b) In the case of any reclassification, recapitalization or
change of the Designated Preferred Stock (other than any action for which
adjustment is made pursuant to Section 4(a) hereof and other than a change as
contemplated by Section 12(b) hereof), the Company shall execute a new warrant
providing that the Holder of this Warrant shall have the right to exercise such
new warrant and to procure upon such exercise and payment of the same aggregate
Exercise Price, in lieu of the shares of Designated Preferred Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares, other
securities, money or property receivable upon such reclassification,
recapitalization or change of the Designated Preferred Stock.
(c) In the case of any merger or any capital reorganization of
the shares of the Company's stock (other than a combination, reclassification,
exchange or subdivision of shares otherwise provided for herein), or a merger or
consolidation of the Company with or into another corporation
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whether or not the Company is the surviving corporation other than as set forth
in section 13(c) hereof (hereinafter referred to as a "Merger Event"), then, as
a part of such Merger Event, lawful provision shall be made so that the Holder
shall thereafter be entitled to receive, upon exercise of the Warrant, the
number of shares of Designated Preferred Stock or other securities of the
successor corporation resulting from such Merger Event, equivalent in value to
that which would have been issuable if Holder had exercised this Warrant
immediately prior to the Merger Event. In any such case, appropriate adjustment
(as determined in good faith by the Company's Board of Directors) shall be made
in the application of the provisions of this Warrant with respect to the rights
and interest of the Holder after the Merger Event to the end that the provisions
of this Warrant (including adjustments of the Exercise Price and number of
shares of Designated Preferred Stock purchasable) shall be applicable to the
greatest extent possible.
5. Notice of Adjustments. Whenever the number of shares of Designated
Preferred Stock purchasable hereunder or the Exercise Price thereof shall be
adjusted pursuant to Section 4 hereof, the Company shall provide notice to the
Holder setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the number of shares of Designated Preferred Stock which may be
purchased and the Exercise Price therefor after giving effect to such
adjustment.
6. Fractional Shares. This Warrant may not be exercised for fractional
shares, but in lieu of such fractional shares the Company shall make a cash
payment therefor upon the basis of the Exercise Price then in effect.
7. Representations and Warranties by the Company. The Company
represents, covenants and warrants to the Holder as follows:
(a) The Company represents that all corporate actions on the
part of the Company, its officers, directors and shareholders necessary for the
sale and issuance of shares of Designated Preferred Stock pursuant hereto and
the performance of the Company's obligations hereunder were taken prior to and
are effective as of the effective date of this Warrant.
(b) If the Company proposes at any time to enter into a
transaction described in Section 12(b) or Section 12(c) hereof, the Company
shall give Holder at least fifteen (15) days written notice prior to the
consummation of such transaction.
(c) Reservation of Designated Preferred Stock. The Designated
Preferred Stock issuable upon exercise of the Holder's rights will be duly and
validly reserved and, when issued in accordance with the provisions of this
Warrant, will be validly issued, fully paid and non-assessable, and will be free
of any taxes, liens, charges or encumbrances of any nature whatsoever; provided,
however, that the Designated Preferred Stock issuable pursuant to this Warrant
may be subject to restrictions on transfer under state and/or Federal securities
laws. The Company has made available to the Holder true, correct and complete
copies of its Amended and Restated Certificate of Incorporation ("CHARTER") and
Bylaws, as amended. The issuance of certificates for shares of Designated
Preferred Stock upon exercise of the Warrant shall be made without charge to the
Holder for any issuance tax in respect thereof, or other cost incurred by the
Company in connection with such exercise and the related issuance of shares
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of Designated Preferred Stock. The Company shall not be required to pay any tax
which may be payable in respect of any transfer involved and the issuance and
delivery of any certificate in a name other than that of the Holder.
(d) Due Authority. The execution and delivery by the Company of
this Warrant and the performance of all obligations of the Company hereunder,
including the issuance to Holder of the right to acquire the shares of
Designated Preferred Stock, have been duly authorized by all necessary corporate
action on the part of the Company, and this Warrant is not inconsistent with the
Company's Charter or Bylaws, does not contravene any law or governmental rule,
regulation or order applicable to it, does not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract
or other instrument to which it is a party or by which it is bound, and this
Warrant constitutes a legal, valid and binding agreement of the Company,
enforceable in accordance with its respective terms.
(e) Consents and Approvals. No material consent or approval of,
giving notice to, registration with, or taking of any other action in respect of
any state, Federal or other governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant, except for the filing of notices pursuant to
Regulation D under the Act and any filing required by applicable state
securities laws, which filings will be effective by the time required thereby.
(f) Issued Securities. All issued and outstanding shares of
Common Stock, Preferred Stock or any other securities of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of Common Stock, Preferred Stock and any other securities
were issued in full compliance with all Federal and state securities laws. In
addition:
(i) As of June 29, 1998, the authorized capital of the
Company consists of (A) 20,000,000 shares of Common Stock, of which 2,272,814
shares are issued and outstanding, and (B) 10,756,250 shares of Preferred Stock,
of which 2,000,000 shares are designated Series A Preferred Stock ("SERIES A
PREFERRED") all of which is issued and outstanding, 3,781,250 shares are
designated Series B Preferred Stock ("SERIES B PREFERRED"), 3,750,000 shares of
which are issued and outstanding and 23,437 shares of which are reserved for
issuance upon exercise of outstanding warrants, 975,000 shares are designated
Series C Preferred Stock ("SERIES C PREFERRED"), 937,500 shares of which are
issued and outstanding and 4,000,000 shares are designated Designated Preferred
Stock up to 3,675,170 shares of which may be sold pursuant to that certain Stock
Purchase Agreement dated as of June 26, 1998 by and among the Company and the
investors listed on Exhibit A attached thereto and up to 153,031 shares of which
are reserved for issuance upon exercise of outstanding warrants or for future
warrant grants with respect to agreements entered into with the Holder. Each
share of Series A Preferred, Series B Preferred, Series C Preferred and
Designated Preferred Stock outstanding is currently convertible into one share
of Common Stock.
(ii) The Company has reserved 2,000,000 shares of Common
Stock for issuance under its 1996 Stock Option Plan, under which 491,111 shares
are issued and outstanding and options for an aggregate of 1,150,750 shares are
outstanding as of June 29, 1998. Except as set forth
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herein there are no other options, warrants, conversion privileges or other
rights presently outstanding to purchase or otherwise acquire any authorized but
unissued shares of the Company's capital stock or other securities of the
Company.
(iii) Except as set forth in the Amended and Restated
Investor Rights Agreement dated June 26, 1998 ("INVESTOR RIGHTS AGREEMENT"), no
shareholder of the Company has preemptive rights to purchase new issuances of
the Company's capital stock.
(g) Insurance. The Company has in full force and effect
insurance policies, with extended coverage, insuring the Company and its
property and business against such losses and risks, and in such amounts, as are
customarily insured against in Company's line of business as otherwise may be
required pursuant to the terms of any other contract or agreement, subject to
customary deductibles.
(h) Other Commitments to Register Securities. Except as set
forth in the Investor Rights Agreement, the Company is not, pursuant to the
terms of any other agreement currently in existence, under any obligation to
register under the Act any of its presently outstanding securities or any of its
securities, which may hereafter be issued.
(i) Exempt Transaction. Subject to the accuracy of the Holder's
representation in Section 10 hereof and provided that (a) such representations
are correct at the time this Warrant is exercised, (b) this Warrant is not
transferred and (c) the laws with respect to the subject matter herein are not
amended, the Company covenants that the issuance of the Designated Preferred
Stock upon exercise of this Warrant will constitute a transaction exempt from
(i) the registration requirements of Section 5 of the Act, in reliance upon
Section 4(2) thereof, and (ii) the qualification requirements of the applicable
state securities laws.
(j) Compliance with Rule 144. At the written request of the
Holder, who proposes to sell Designated Preferred Stock issuable upon the
exercise of the Warrant in compliance with Rule 144 within thirty days after
receipt of such request, a written statement confirming the Company's compliance
with the filing requirements of the Securities and Exchange Commission as set
forth in such Rule, as such Rule may be amended from time to time.
8. Representations and Warranties by the Holder. The Holder represents
and warrants to the Company as follows:
(a) This Warrant and the shares of Designated Preferred Stock
issuable upon exercise hereof are being acquired for the Holder's own account,
for investment and not with a view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Act. Upon
exercise of this Warrant, the Holder shall, if so requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the securities
issuable upon exercise of this Warrant are being acquired for investment and not
with a view toward distribution or resale.
(b) The Holder understands that the Warrant and the shares of
Designated Preferred Stock issuable on exercise hereof have not been registered
under the Act by reason of their issuance in
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a transaction exempt from the registration and prospectus delivery requirements
of the Act pursuant to Section 4(2) thereof, and that they must be held by the
Holder indefinitely, and that the Holder must therefore bear the economic risk
of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Act or is exempted from such registration. The Holder
further understands that the shares of Designated Preferred Stock issuable on
exercise hereof have not been qualified under the blue sky laws of any
jurisdiction by reason of their issuance in a transaction exempt from the
qualification requirements of such blue sky laws, which exemption depends upon,
among other things, the bona fide nature of the Holder's investment intent
expressed above.
(c) The Holder has such knowledge and experience in financial
and business matters that the Holder is capable of evaluating the merits and
risks of the purchase of this Warrant and the shares of Designated Preferred
Stock purchasable pursuant to the terms of this Warrant and of protecting the
Holder's interests in connection therewith. The Holder is aware of the Company's
business affairs and financial condition, and believes it has sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Securities.
(d) The Holder is able to bear the economic risk of the purchase
of the Designated Preferred Stock issuable on exercise of this Warrant.
9. Restrictive Legend.
The Designated Preferred Stock issuable on exercise of this
Warrant shall (unless registered under the Act) be stamped or imprinted with a
legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
CORPORATION RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
COPIES OF THE AGREEMENTS COVERING THE PURCHASE OF THESE SHARES
AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE
TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE CORPORATION."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF THE CORPORATION'S AMENDED
AND RESTATED INVESTOR RIGHTS AGREEMENT, DATED JUNE 26,
1998. A COPY OF SUCH AGREEMENT MAY BE OBTAINED WITHOUT
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CHARGE UPON WRITTEN REQUEST TO THE CORPORATION AT ITS
PRINCIPAL PLACE OF BUSINESS."
10. Restrictions Upon Transfer and Removal of Legend.
(a) The Company need not register a transfer of this Warrant or
shares of Designated Preferred Stock issued on exercise of this Warrant bearing
the restrictive legend set forth in Section 9 hereof, unless the conditions
specified in such legend are satisfied and, at the discretion of the Company,
the Company has received such representations from the transferee as the Company
deems necessary to ensure compliance with applicable securities laws. The
Company may also instruct its transfer agent not to register the transfer of the
Shares unless one of the conditions specified in the legend referred to in
Section 9 hereof is satisfied.
(b) Notwithstanding the provisions of paragraph (a) above, no
opinion of counsel or "no-action" letter shall be necessary for a transfer
without consideration by any holder (i) to an affiliate of the holder, (ii) if
such holder is a partnership, to a partner or retired partner of such
partnership who retires after the date hereof or to the estate of any such
partner or retired partner, (iii) if such holder is a corporation, to a
shareholder of such corporation, or to any other corporation under common
control, direct or indirect, with such holder, or (iv) by gift, will or
intestate succession of any individual holder to his spouse or siblings, or to
the lineal descendants or ancestors of such holder or his spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were the original holder hereunder.
11. Rights of Shareholders. No holder of this Warrant shall be entitled,
as a Warrant holder, to vote or receive dividends or be deemed the holder of the
shares of Designated Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the holder of this
Warrant, as such, any of the rights of a shareholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
12. Expiration of Warrant. This Warrant shall expire and shall no longer
be exercisable upon the first to occur of:
(a) 5:00 p.m., California local time, on March 25, 2008;
(b) Five (5) years after the effective date of the Company's
initial public offering; or
(c) The merger or consolidation of the Company with or into, or
other corporate reorganization of the Company with, or the sale of all or
substantially all of the assets of the Company to, any third party other than
any such transaction following which the shareholders of the Company
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prior to the transaction own, by virtue of their holdings of securities of the
Company prior to the transaction, a majority of the equity securities of the
corporation surviving to the business and assets of the Company.
13. Requests for Registration. Holder and Company agree that all shares
of Designated Preferred Stock subject to the Warrant shall have the same
registration rights and be subject to the same terms and conditions with respect
to the registration and sale of such stock as possessed by the other Holders of
Designated Preferred Stock.
14. Notices. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given upon receipt or, if earlier, (a) five (5) days after
deposit with the U.S. Postal Service or other applicable postal service, if
delivered by first class mail, postage prepaid, (b) upon delivery, if delivered
by hand, (c) one (1) business day after the business day of deposit with Federal
Express or similar overnight courier, freight prepaid or (d) one (1) business
day after the business day of facsimile transmission, if delivered by facsimile
transmission with copy by first class mail, postage prepaid, and shall be
addressed (i) if to the Holder, at the Holder's address as set forth beneath the
Holder's signature to this Warrant, and (ii) if to the Company, at the address
of its principal corporate offices (attention: Company Secretary), or at such
other address as the Company shall have furnished to the other parties hereto in
writing.
15. Governing Law. This Warrant and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of California, without regard to the conflicts of law
provisions of the State of California; provided, however, that to the extent the
value of the Warrants is considered in evaluating compliance with usury laws
pursuant certain loan agreement entered into between the Company and the Holder,
the laws of the State of Illinois shall govern.
16. Entire Agreement. This Warrant contains the entire agreement among
the Company and the Holder with regard to the subject matter hereof.
17. Successors and Assigns. The terms and provisions of this Warrant
shall be binding upon the Company and the Holder and their respective
successors, assigns, heirs and legal representatives.
18. Titles and Subtitles. The titles and subtitles used in this Warrant
are for convenience only and are not to be considered in construing or
interpreting this Warrant.
19. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and disbursements in addition to
any other relief to which such party may be entitled.
20. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder.
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21. Severability. If one or more provisions of this Warrant are held to
be unenforceable under applicable law, such provision shall be excluded from
this Warrant and the balance of the Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
22. Effective Date: The provisions of this Warrant shall be construed
and shall be given effect in all respects as if it had been executed and
delivered by the Company on the date hereof. This Warrant shall be binding upon
any successors or assigns of the Company.
23. Counterparts. This Warrant may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
24. Remedies. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit or equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where Holder will not have an adequate remedy at law and where damages
will not be readily ascertainable.
25. No Impairment of Rights. The Company will not, by amendment of its
Charter or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Holder against impairment.
26. Survival. The representations, warranties, covenants and conditions
of the respective parties contained herein or made pursuant to this Warrant
shall survive the execution and delivery of this Warrant.
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ANTIDILUTION PROVISION
Antidilution Provision. Except with respect to those antidilution
provisions contained herein, the Designated Preferred Stock issuable upon
execution of this Warrant shall be granted the same antidilution protection as
the other holders of Designated Preferred Stock. The Company shall promptly
provide the Holder with any restatement, amendment, modification or waiver of
the Charter that materially affects the rights, preferences and privileges of
the Designated Preferred Stock. The Company shall provide Holder with prior
written notice of any issuance of its stock or other equity security that will
implicate such antidilution provisions to occur after the Effective Date of this
Warrant, which notice shall include (a) the price at which stock or security is
to be sold, (b) the number of shares to be issued, and (c) such other
information as necessary for Holder to determine if a dilutive event has
occurred.
Issued this 29th day of June, 1998.
EXTENSITY, INC.
/s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx, President
ACCEPTED:
/s/ XXXXX X. XXXX
-------------------------------------------
By: XXXXX X. XXXX
----------------------------------------
Title: PRESIDENT COMDISCO VENTURES DIVISION
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EXHIBIT A
NOTICE OF EXERCISE
TO: EXTENSITY, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
1. The undersigned hereby elects to purchase __________ shares of
Designated Preferred Stock of EXTENSITY, INC. (the "COMPANY") pursuant to the
terms of the attached Warrant.
2. Method of Exercise (Please initial the applicable blank):
___ The undersigned elects to exercise the attached Warrant by
means of a cash payment, and tenders herewith payment in
full for the purchase price of the shares being purchased,
together with all applicable transfer taxes, if any.
___ The undersigned elects to exercise the attached Warrant by
means of the net exercise provisions of Section 2(b) of
the Warrant.
3. Please issue a certificate or certificates representing said shares
of Designated Preferred Stock in the name of the undersigned or in such other
name as is specified below:
_______________________________________
(Name)
_______________________________________
_______________________________________
(Address)
4. The undersigned hereby represents and warrants as follows:
(a) The shares of Designated Preferred Stock being acquired
hereby (the "SECURITIES") are being acquired for the account of the undersigned
for investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares, except pursuant to a registration or
exemption.
(b) All representations and warranties of the undersigned set
forth in Section 8 of the attached Warrant are true and correct as of the date
hereof.
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(c) The undersigned is aware of the Company's business affairs
and financial condition, and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Securities. The undersigned is purchasing the Securities for the undersigned's
own account for investment purposes only and not with a view to, or for the
resale in connection with, any "distribution" thereof for purposes of the
Securities Act of 1933, as amended (the "ACT").
(d) The undersigned understands that the Securities have not
been registered under the Act in reliance upon a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of its
investment intent as expressed herein. In this connection, the undersigned
understands that, in the view of the Securities and Exchange Commission (the
"SEC"), the statutory basis for such exemption may be unavailable if its
representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax statutes,
for a deferred sale, for or until an increase or decrease in the market price of
the Securities, or for a period of one year or any other fixed period in the
future.
(e) The undersigned further understands that the Securities must
be held indefinitely unless subsequently registered under the Act or unless an
exemption from registration is otherwise avail able. Moreover, the undersigned
understands that the Company is under no obligation to register the Securities.
In addition, the undersigned understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel for the Company.
(f) The undersigned is familiar with the provisions of Rule 144,
promulgated under the Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof, in a non-public offering subject to the satisfaction of certain
conditions. The Securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires among other things, except
as otherwise provided by section (k) of such Rule 144: (1) the availability of
certain public information about the Company, (2) the resale occurring not less
than one (1) year after the party has purchased, and made full payment for,
within the meaning of Rule 144, the securities to be sold; and, (3) in the case
of an affiliate, or of a non-affiliate who has held the securities less than two
(2) years, the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three (3) month period not exceeding the specified
limitations stated therein, if applicable.
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(g) The undersigned further understands that in the event all of
the applicable requirements of Rule 144 are not satisfied, registration under
the Act, compliance with Regulation A, or some other registration exemption will
be required; and that, notwithstanding the fact that Rule 144 is not exclusive,
the Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
By:_________________________________
Title:______________________________
Date:_______________________________
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EXHIBIT B
FORM OF TRANSFER
(To be signed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________________________________ the right represented by
the attached Warrant to purchase ____________ shares of the Designated Preferred
Stock of EXTENSITY, INC. to which the attached Warrant relates, and appoints
______________ Attorney to transfer such right on the books of EXTENSITY, INC.
with full power of substitution in the premises.
Dated: ____________________
____________________________________
(Signature must conform in all
respects to the name of the Holder
as specified on the face of the
Warrant)
____________________________________
____________________________________
(Address)
Signed in the presence of:
____________________________________
